This encyclopedia entry explains the once controversy over advertising and the types and scope of it now. Monopoly and regulation are among the topics tied into this depiction of advertising. [Details...]

This encyclopedia entry explains how the United States Airline Deregulation Act of 1978 was a dramatic event in the history of economic policy. It was the first thorough dismantling of a comprehensive system of government control since the Supreme Court declared the National Recovery Act unconstitutional in 1935. [Details...]

This encyclopedia entry talks about the incomplete information that consumers have regarding brand names. It also tells how the government has stepped in but can only do so much to help consumers know about products. [Details...]

The cotton gin developed by Eli Whitney in 1793 marked a major turning point in the economic history of the Southern United States. This article describes what came before Eli Whitney and his innovative design. [Details...]

The modern history of drug regulation in the United States has been marked by the simultaneous pursuit of two goals: safety and efficacy. This article describes this insight and provides evidence of cases where costs incurred due to lawsuits proved to be too much. [Details...]

This article explains the rationale and development for fire insurance. It gives a table of the various companies within the different states and the year of formation. Graphs depict fire losses and other variables. [Details...]

Throughout history, governments have regulated food and drug products. In general, the focus of this regulation has been on ensuring the quality and safety of food and drugs. This article expands upon this to detail the history of this particular regulation. [Details...]

The electric telegraph was one of the first telecommunications technologies of the industrial age. This article explains its invention and development throughout the years and at the end gives a timeline of those events. [Details...]

Industrial concentration occurs when a small number of companies sell a large percentage of an industry's product. The most widely used measure of concentration is the so-called four-firm concentration ratio, which is the percentage of the industry's product sold by the four largest producers. [Details...]

National industrial policy is a rubric for a broad range of proposed economic reforms that emerged as a unified political program in the early eighties. This article goes on to talk about the program since then. [Details...]

The international shipping industry has been characterized by a remarkable degree of collusion for more than a century. This article shows the attempts at collusion and the government's role and responsibility. [Details...]

The historical gas industry includes two chemically distinct flammable gasses. These are natural gas and several variations of manufactured coal gas. Both are explained in more detail throughout the course of the article. [Details...]

Until World War II, the Cotton South remained poor, backward, and un-mechanized. With minor exceptions, most tasks -- plowing, cultivating, and finally harvesting cotton -- were done by hand. The mechanical cotton picker played an indispensable role in the transition from the prewar South of over-population, sharecropping, and hand labor to the capital-intensive agriculture of the postwar South. [Details...]

A monopoly is an industry in which there is one seller. Because it is the only seller, the monopolist faces a downward-sloping demand curve, the industry demand curve. This article explains whether a monopoly is desirable or not. [Details...]

Natural gas is methane in underground deposits, produced by the same geological processes as oil. The regulation over the years has changed dramatically from a lot to more lenience in the recent years. [Details...]

Few people are aware of it today, but OPEC (the Organization of Petroleum Exporting Countries) was formed in response to the U.S. imposition of import quotas on oil. OPEC is a cartel: a group of producers that attempts to restrict output in order to keep prices higher than the competitive level. [Details...]

Most Americans know that practicing medicine without a license is against the law. A careful analysis of licensing's effects across a broad range of occupations reveals some striking, and strikingly negative, similarities. [Details...]

Early U.S. commercial banks were for-profit business firms, usually structured as joint-stock companies. As financial intermediaries, commercial banks pooled the wealth of a large number of savers and lent fractions of that pool to a diverse group of enterprising business firms. [Details...]

The advent of the electric industry in the 1880s ushered forward a rapidly expanding domestic market in the United States. This article describes the origins of this phenomenon and the outcomes for today. [Details...]

The savings and loan industry is the leading source of institutional finance for residential home mortgages in America. This article discusses the origins and the history thus far of this industry. [Details...]

Telecommunications is important for two reasons. First, it plays a vital role in the organization and operation of the modern global economy. Second, the problems associated with regulating and organizing the telecommunications industry have stimulated a great deal of economic analysis that is important in its own right and relevant to other sectors of the economy as well. [Details...]

A commercial fur trade in North America grew out of the early contact between Indians and European fisherman who were netting cod on the Grand Banks off Newfoundland and on the Bay of Gaspe near Quebec. [Details...]

The aerospace industry ranks among the world's largest manufacturing industries in terms of people employed and value of output. Yet even beyond its shear size, the aerospace industry was one of the defining industries of the twentieth century. [Details...]

Natural rubber was first used by the indigenous peoples of the Amazon basin for a variety of purposes. This article describes its uses and the labor structures which emerged to extract rubber for commercial purposes. [Details...]

The coal industry was a major foundation for American industrialization in the nineteenth century. As a fuel source, coal provided a cheap and efficient source of power for steam engines, furnaces, and forges across the United States. [Details...]

The federal government has been regulating prices and competition in interstate transportation ever since Congress created the Interstate Commerce Commission (ICC) to oversee the railroad industry in 1887. This article describes the costs and regulations and the successes of deregulation. [Details...]

This program sets up a multi-person game in which each person chooses a price in a Bertrand game with linear demand and constant marginal cost. The game highlights severe competitive pressures when there are several sellers. [Details...]

This program sets up one or more markets in which each person is a seller who chooses a production quantity. This is a Cournot game with linear demand and constant marginal cost. The game can be used to motivate discussion of the Nash/Cournot predictions. There may be tacit collusion with few sellers and fixed matchings, and there may be severe competitive pressures when there are several sellers. [Details...]

This program sets up a multi-person game in which each person chooses whether or not to enter a market. The payoff for all people who enter is a decreasing function of the number of entrants, and the payoff for not entering is a constant. The incentives are typically such that each person would prefer to enter if the others are unlikely to do so, and would prefer to stay out if the others are likely to enter. [Details...]

This program runs a one-sided auction in which sellers post prices independently on a take-it-or-leave-it basis at the start of each market period or "round." Buyers then place orders at the posted prices. The program collects and displays price information. The "admin" module calculates the theoretical competitive price for comparison. [Details...]

This program uses an interactive web-based interface to run a set of vertically related markets, as described in a 2003 discussion paper: "Double Monopoly: A Classroom Experiment," by Narine Badasyan, Jacob Goeree, Monica Hartmann, Charles Holt, John Morgan, Tanya Rosenblat, and Dirk Yandell. The first mover (wholesaler) in each group selects a wholesale price, and the second movers (retail monopolists in local markets) choose their whole purchase quantities and retail price levels. The equilibrium for vertically related monopolists produces a quantity restriction, even relative to a vertically integrated monopolist, and therefore, the vertical integration "solution" can be implemented in a second treatment option. A third treatment option lets the wholesaler set a wholesale price and a fixed franchise fee, which in theory, can also "solve" the vertical monopoly problem. [Details...]

Citizens of the countries of the former Soviet Union (FSU) have recognized the potential benefits, observed in many different cultures and societies around the world, of private, market-driven enterprises. For more than half a century enterprises in the FSU have been subject to comprehensive state ownership and central planning. Prices and financing were typically of little concern to enterprise management, while workers did not have to worry about job security and received a wide range of social benefits through enterprises. While moving toward private, market-driven enterprises offers great promise for an improved standard of living for the average person, such a transition represents a fundamental social, psychological, and economic challenge. [Details...]

The privatization of Kenya Airways was the first-ever privatization of an African airline. The sale of a major state-owned asset is usually a highly charged political event, and the two-year process by which 77% of the shares of Kenya Airways were sold to a broad array of private investors was no exception. From the outset the press and public of Kenya speculated as to how and when the process would fail, and which interests would profit from that failure. Yet the privatization was carried out successfully. [Details...]

This is a configuration for a MarketLink double auction
experiment that tests the predictions of the competitive
market model. The marginal cost and marginal revenue
curves for this configuration are identical to those in
ICV-Duop1-DA and ICV-Monop1-DA so that competitive,
duopolistic, and monopolistic models can be compared
directly. [Details...]

This is a configuration for a MarketLink posted offer
experiment that tests the predictions of the competitive
market model. The marginal cost and marginal revenue
curves for this configuration are identical to those in
ICV-Duop1-PO and ICV-Monop1-PO so that competitive,
duopolistic, and monopolistic models can be compared
directly. [Details...]

This is a configuration for a MarketLink double auction
experiment that tests the predictions of the duopoly
market model. The marginal cost and marginal revenue
curves for this configuration are identical to those in
ICV-Comp1-DA and ICV-Monop1-DA so that competitive,
duopolistic, and monopolistic models can be compared
directly. [Details...]

This is a configuration for a MarketLink posted offer
experiment that tests the predictions of the duopoly
market model. The marginal cost and marginal revenue
curves for this configuration are identical to those in
ICV-Comp1-DA and ICV-Monop1-DA so that competitive,
duopolistic, and monopolistic models can be compared
directly. [Details...]

This is a configuration for a MarketLink double auction
experiment that tests the predictions of the monopoly
market model. The marginal cost and marginal revenue
curves for this configuration are identical to those in
ICV-Comp1-DA and ICV-Duop1-DA so that competitive,
duopolistic, and monopolistic models can be compared
directly. [Details...]

This is a configuration for a MarketLink posted offer
experiment that tests the predictions of the monopoly
market model. The marginal cost and marginal revenue
curves for this configuration are identical to those in
ICV-Comp1-DA and ICV-Duop1-DA so that competitive,
duopolistic, and monopolistic models can be compared
directly. [Details...]

For a number of years, I have been using a simple and brief classroom experiment to illustrate the power of game theory in explaining the behavior of oligopolists. The whole presentation takes about fifteen minutes of class time, and it has worked well in the Principles of Microeconomics course. [Details...]

The purpose of the very simple classroom experiment we develop in this paper is precisely to present to students the key facets of the Hotelling model in a very intuitive yet comprehensive way. An interesting point is that the experiment actually allows one to deal with a priori purely technical issues such as the non-existence problem identified by d'Aspremont et al. (1979). The purpose of the experiment is thus to capture the whole story of spatial competition, including the clustering tendency by firms, price- competition problems, the demand-proximity effect, regulation aspects, and the political competition interpretation of spatial models. [Details...]

Both games are conducted in class and they have a short follow-up assignment that is announced after the game is finished. This assignment is meant to help the students understand what they have been doing and why the two games are different.
In the coordination game, the students have a common interest (the equilibria are Pareto ranked, and one is efficient). The problem is aligning expectations (and actions). Generally, the students initially settle on an inefficient equilibrium. Direct communication between students allows students to achieve efficiency and move to the Pareto efficient equilibrium without the need for binding commitments.
In contrast, in the motivation game, the players have a personal interest diametrically opposed to the common interest (a sort of multilateral prisoner's dilemma). By playing the game, students come to realize how difficult it can be to achieve cooperation when the benefits to defection are great. Even in the classroom, it seems impossible to get the Pareto optimal equilibrium without some kind of binding agreement. [Details...]

After discussing perfectly competitive and monopoly market structures, most introductory courses cover oligopolies. I have found that the key to students understanding oligopoly market structures is for them to appreciate interdependence. When I first tell classes that oligopolies are interdependent, they are thrilled to know (after perfect competition and monopoly) that this means no curves (I don't use kinked demand). The thrill is somewhat abated when they realize that it means an alternative treatment is necessary, and it might be worse than the curves were. This is where I think it is important to give the students a sense of the behavioral nature of the models as well as to point out that oligopolies are much more common in the economy. This is a great juncture for introducing a classroom experiment or exercise. [Details...]

To help the students in my senior level industrial organization class understand predation, I run the experiment printed below, which is a modification of Jung, Kagel, and Levin (1994). The experiment takes about 75 minutes to perform. [Details...]